// University News

21 Sep 2016

Parents working on the ‘national living wage’ still can’t earn enough to provide an acceptable minimum living standard for their children, warns a new report by Loughborough University.

Produced by Professor Donald Hirsch for Child Poverty Action Group, the Cost of a Child in 2016 report draws on what the public says every family requires to meet its basic needs and to participate in society. It is based on a series of calculations, supported by Child Poverty Action Group and the Joseph Rowntree Foundation, systematically monitoring the cost of a child.

Pressure on family budgets looks set to intensify for low-income families, with childcare and housing costs increasingly the deciding factor in whether parents can achieve what the public regards as a minimum standard of living, the report concludes.

Families with two parents working full time on the ‘national living wage’ are 12% short of the basic amount needed for a minimum standard of living – as defined by the public – the report shows. That’s a gap of £50 per week (but a fall on 2014-15 from 16%). For these families, disposable income as a percentage of minimum family costs has grown by 4% since 2012.

For lone parents working full time on the national living wage the shortfall is worse. They are 16% short of what is needed for a minimum living standard (up from 13% in 2014- 15) – a gap of £55 per week. For these families disposable income as a percentage of minimum family costs has fallen by 6% since 2012.

The report finds the minimum cost of a child from birth to 18 is now £151,600 for a couple – a slight increase (1.2%) on 2014-15. For lone parents the cost is £182,589 – a 9% jump on the previous year.

For out-of- work families with two children the gap between their income and the amount needed for a minimum living standard is stark: couples families are 39% short, lone parent families 37%.

Child benefit plus maximum child tax credit together cover only 72% of the costs of a child for lone parents. The percentage for couple families is 98%.